How AI, blockchain and IoT help finance boost operations

03 March 2020 Consultancy.uk

A new study suggests that organisations adopting emerging technologies in finance operations are growing their annual profits at a vastly accelerated rate. The international research asserts that artificial intelligence, Internet of Things, and blockchain are finally passing the adoption tipping point to deliver a competitive advantage for businesses.

Digital technology has long been discussed as a potential ‘game-changer’ in modern business, with artificial intelligence (AI), blockchain and Internet of Things (IoT) all being labelled ways for companies to save large sums of money in efficiencies, and improve security, productivity and customer experience in the process. As a result, investors have been diving into various pilot schemes over the last two years. However, new technology’s often expensive application has often been said to be over-hyped.

While it has seen a great deal of excited uptake, for example, the volume of trade through various blockchain schemes has been so negligible at time of writing that it is too early to tell how soon blockchain might reach a critical mass, if at all. Similarly, many firms are still finding that AI and automation are not yielding the benefits they expected – something which is often blamed on firms merely applying it as a cost-saving exercise, but still throws up questions about the technology’s true value. IoT meanwhile continues to struggle to drum up significant interest in the automotive market, among others.

AI is delivering benefits to finance teams at scale

However, while all these factors do merit closer inspection, a new study from Enterprise Strategy Group and Oracle claims that new technologies are finally having a big impact on business performance. According to a survey of 700 finance and operations leaders across 13 countries, AI, IoT and blockchain deployments are passing their adoption tipping point, creating significant competitive advantage for organisations. Respondents from organisations adopting emerging technologies in finance and operations told the researchers they were growing their annual profits 80% faster than those who did not.

Benefits

Focusing on the financial sector, the study found that the highest number of solutions currently in use to improve financial systems came in the form of IoT – at 43% of respondents. Meanwhile, 36% said AI and machine learning functions were fully operational, and 30% were fully using blockchain to that end. The highest number of respondents (38%) also said they had AI pilots in place, suggesting this will soon be the most common form of emergent technology used to improve financial systems.

Actual IoT benefits surpass expectations

Almost three-quarters of respondents using AI said it was most commonly benefitting finance teams by delivering an improved understanding of why a business is performing at its current level. This was followed by more than seven-in-ten of those quizzed, who said AI was enabling for faster analysis and insights – a key advantage in the rapidly changing businesses environment. The other stand-out response was that 68% of the sample said AI had helped reduce errors in automated tasks.

In terms of IoT, meanwhile, respondents suggested the technology is now surpassing expectations of it on most fronts. While only 40% of those not currently enhancing their finance systems with IoT expect it would lead to better inventory and asset management, a majority of 51% among those using it reported it had done just that. Similarly, while 42% said they thought IoT might improve their forecasting of demand, income, and costs, 50% reported it was fulfilling that role. While it would be wrong to say that means IoT is ‘11% more useful’ than expected, it does suggest that at least a portion of firms are missing out by not applying it.

Similarly, blockchain seems to be beating expectations in this manner. As data security is noted as one of blockchain’s key strengths, it’s not particularly surprising that a similar number of firms thought it would improve their ERP system’s safety to the number saying it had done so. Elsewhere, however, a scarce 22% of non-users said they thought it would enhance their ERP system’s ability to reduce reliance on manual processes if deployed, but 37% of those using it said that it had done so. On top of this, 26% said they thought it might improve corporate governance, whereas 37% asserted that it had helped achieve this.

Blockchain benefits: Beating expectations

Speaking on the findings, Juergen Lindner, Oracle’s Senior Vice President in SaaS product marketing, said, “AI, IoT, blockchain… capabilities enable organisations to innovate faster, creating significant competitive advantage and driving increased profit for companies embracing those technologies more decisively than their competitors… The research finds that these technologies have become mainstream and organisations that sit on the sidelines risk their business relevance.”

“This study makes it clear that emerging technologies have passed the trial phase and are moving toward a state of widespread adoption,” added John McKnight, EVP of Research and Analyst Services of Enterprise Strategy Group. “The business case for these technologies in areas such as finance and operations is maturing at a rapid pace – and in most cases benefits exceed expectations. Furthermore, the research shows that emerging technologies complement and amplify the benefits of one another, which underscores the importance of taking a holistic approach.”


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